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bar prepppeppep > formalities – corporations > Flashcards

formalities – corporations Flashcards

1
Q

pre-incorporation acts

general rule as to corporation liability for pre-incorporation acts

A

corporation generally not liable for pre-incorporation acts

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2
Q

pre-incorporation acts

when is a corporation liable for pre-incorporation acts

A

if they ratify the agreement
* explicit –board adopts a resolution agreeing to be bound by agreement
* implied – conduct; accepting the benefits of the agreement

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3
Q

formation

how is a de jure corporation formed

A
  1. articles of incorporation
  2. affidavit of acceptance of the corporation’s registered agent

both of these must be filed with the SOS

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4
Q

formation

how is a de facto corporation formed

A

formed when there’s a good faith attempt to create a corporation, but there was some omission

the court may still treat the corporation as having been formed where the equities of a particular situation so merit

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5
Q

formation

what must the articles of incorporation include

A
  1. name of the corporation
  2. number of shares the corporation is authorized to issue
  3. street address of initial registered office, and if different, the street address of the initial principal office
  4. the name and street address of the initial registered agent
  5. the name and address of each incorporator
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6
Q

formation

what is the effect of the articles of incorporation including a narrow business purpose

A

the corporation may not undertake activities unrelated to the purpose

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6
Q

formation

what can the articles of incorporation include

A

other provisions relative to managing the business and regulating the affiars of the corporation

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6
Q

formation

what happens after the articles are filed

A

the initial directors (or incorporators if no directors named) will hold an organizational meeting to adopt bylaws, elect officers, and transact other business

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7
Q

formation

what can the articles of incorporation include

A

other provisions relative to managing the business and regulating the affiars of the corporation

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7
Q

formation

what can the bylaws include

A

any provision for managing the corporation that is not inconsistent with law or the article of incorporation

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8
Q

formation

how are bylaws adopted

A

adopted by directors, but can be modified or repealed by either directors or shareholders

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9
Q

formation

what can the shareholders provide in relation to a bylaw

A

a particular bylaw adopted or amended by them may not be repealed or amended by the directors

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10
Q

formation

what is required for any bylaw adopted

A

must be consistent with the articles

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11
Q

stock certificates

who is required to issue stock certificates

A

business corporation are required to issue, unless the corporation is a participant in the Direct Registration System of the Depository Trust and Clearing Corporation or of a similar book-entry system used in the trading of shares of public corporations

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12
Q

stock certificates

what is the consequence of failing to issue stock certificates

A

requirement is a duty imposed on the corporation – shareholders are not penalized if they don’t receive stock certificates

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13
Q

stock certificates

what must be included on the stock certificate

A
  1. the name of the corporation and that it is organized under the laws of this state
  2. the name of the person to whom it’s issued
  3. the number and class of shares and the designation of shares, if any, the certificate represents
  4. the president and secretary’s signatures, or the signatures of two officers designated in the bylaws or by the directors
14
Q

proxies

what is the general rule as to proxies for directors

A

generally, directors must be physically present at a meeting to vote; to allow proxies, the articles must provide for it

15
Q

proxies

what are the limitations imposed on proxies for directors

A
  1. director may only appoint a fellow board member as his/her proxy
  2. proxy is only valid for one meeting (articles can provide for longer appointments, however)
16
Q

proxies

what is the general rules for proxies for shareholders

A

able to vote either in person or by proxy with no special authorization required

17
Q

proxies

who may the shareholders appoint as a proxy and what is the process

A
  • can appoint any other person and are not limited to appointing fellow shareholders
  • appoint in writing or electronic transmission by shareholder
  • effective upon receipt by the individual authorized to tabulate votes
18
Q

proxies

are proxies revocable or irrevocable

A
  • generally, revocable by shareholder and valid for 11 months from the date of granting (possible to alter both of these)
  • to be irrevocable, the appointment form must conspicuously state that it is irrevocable, and the appointment is coupled with an interest
19
Q

proxies

how does a shareholder revoke their proxy designation

A
  1. in writing
  2. by shareholder’s presence at the meeting to vote for him/herself
  3. by subsequent appointment of another proxy
20
Q

written consent

how do directors generally act at meetings

A

through actions taken

21
Q

written consent

how can directors take action through written agreement at a meeting

A

must unanimously be signed by the directors
* note: this requirement cannot be altered

22
Q

written consent

how do shareholders generally act at meetings

A

through votes taken

23
Q

written consent

how do shareholders act without a meeting

A

all shareholders entitled to vote on the matter must sign a written consent
* articles can include a provision reducing the unanimity requirement

24
Q

annual report

if the corporations fail to file the annual report, what is the potential consequence

A

termination (potentially)

25
Q

meetings

how often must meetings be held

A

annually

26
Q

meetings

what is the shareholders’ remedy for requesting an annual meeting

A

if no meeting is held for 18 months, any shareholder can demand that the secretary call for a meeting to be held at the registered office

27
Q

meetings

who may call for a meeting

A

any shareholder individually, but none of them are required to do so (unless the secretary is a shareholder)

28
Q

meetings

what are the notice requirements

A
  • must be given at least 10 days but not more than 60 days before the date of the meeting
  • must contain the time, date, and place
  • if the meeting is a special meeting, then the purpose of the meeting must be included as well
29
Q

meetings

how do shareholders waive the notice requirement

A
  • doing so in writing either before or after the meeting
  • merely showing up at the meeting and not objecting to lack of proper notice
30
Q

meetings

what are the requirements for rescheduling a meeting

A

same as those required to schedule a meeting; possible to avoid giving a second notice relative to a reschedueld meeting if the rescheduling happens at a meeting already convened

31
Q

records

what are the first four types of records the corporation must keep at its principal office

A
  1. articles or restated articles of incorporation and all current amendments
  2. bylaws or restated bylaws and all current amendments
  3. resolutions adopted by the board creating one or more clases or series of shares, and fixing their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding
  4. minutes of shareholders’ meetings, and all actions taken by shareholders without a meeting for the last 3 years
32
Q

records

what are the second four types of records the corporation must keep at its principal office

A
  1. all written communications to shareholders within the past 3 years (including financial statements)
  2. a list of the names and business addresses of current directors and officers
  3. most recent annual report delivered to SOS
  4. any unanimous governance agreement in effect
33
Q

veil piercing

what does veil piercing allow

A

reach the personal assets of a shareholder, director, officer, etc.

34
Q

veil piercing

who generally can pierce the corporate veil

A

creditors

35
Q

veil piercing

what are the methods through which veil piercing is appropriate

A
  1. commingling member and corporate funds
  2. inadequate capitalization
  3. failure to maintain a separate identity
37
Q

formation

what can the articles of incorporation include

A

other provisions relative to managing the business and regulating the affiars of the corporation

bar prepppeppep (38 decks)

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